Khiyar

A right, built into a sale contract by law or by agreement, to confirm or rescind the deal. The main types are khiyar al-shart (a negotiated cooling-off period), khiyar al-ayb (the right to return defective goods), khiyar al-ru'yah (the right to cancel on seeing goods bought unseen), and khiyar al-majlis (the right to withdraw before the parties separate).

Khiyar is the Islamic basis for return policies, inspection periods, and contingency clauses in home purchases, and it differs from a financial option because it attaches to a real sale rather than being traded on its own.

Khiyar is the reason the contingencies in a U.S. real estate contract (inspection, appraisal, financing) sit comfortably with Islamic law: each is a khiyar al-shart, a negotiated right to walk away within a stated period. The limit scholars impose is that the period be defined; an open-ended right to cancel makes the sale uncertain (gharar).

The Hanafi school capped khiyar al-shart at three days, the Hanbali school allows any agreed period, and contemporary standards follow the more flexible view. Khiyar al-ayb maps onto implied warranties and lemon laws: a buyer who discovers a defect the seller did not disclose may return the goods or claim a price reduction.

The sharpest practical application is in halal financing: when a provider buys a car or house and resells it to you under Murabaha, the provider may hold khiyar al-ayb against the original seller, and your contract should say whether that right passes to you. Khiyar is also why scholars distinguish an earnest-money deposit (arbun, a down payment inside a real sale) from a traded call option: the first is a sale with a cancellation right, the second is a right sold separately from any asset, which most scholars do not permit.